Correlation Between Edgewell Personal and Nok Airlines

Can any of the company-specific risk be diversified away by investing in both Edgewell Personal and Nok Airlines at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Edgewell Personal and Nok Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Edgewell Personal Care and Nok Airlines Public, you can compare the effects of market volatilities on Edgewell Personal and Nok Airlines and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Edgewell Personal with a short position of Nok Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Nok Airlines.

Diversification Opportunities for Edgewell Personal and Nok Airlines

0.0

Correlation Coefficient

Edgewell Personal  Nok Airlines

Pay attention - limited upside

The 3 months correlation between Edgewell and Nok is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Nok Airlines Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nok Airlines Public and Edgewell Personal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Edgewell Personal Care are associated (or correlated) with Nok Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nok Airlines Public has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and Nok Airlines go up and down completely randomly.

Pair Corralation between Edgewell Personal and Nok Airlines

If you would invest  3,872  in Edgewell Personal Care on February 15, 2024 and sell it today you would earn a total of  242.00  from holding Edgewell Personal Care or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Edgewell Personal Care  vs.  Nok Airlines Public

Edgewell Personal Care

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Edgewell Personal Care are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Edgewell Personal may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Nok Airlines Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nok Airlines Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Nok Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Edgewell Personal and Nok Airlines

The main advantage of trading using opposite Edgewell Personal and Nok Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal position performs unexpectedly, Nok Airlines can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nok Airlines will offset losses from the drop in Nok Airlines' long position.

The idea behind Edgewell Personal Care and Nok Airlines Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.